Toward a Sunny Future? Global Integration in the Solar PV Industry

This paper analyzes the global integration of the
solar photovoltaic (PV) sector and looks in detail at the industry’s recent growth patterns, industry cost structure, trade and investment
patterns, government support policies and employment generation potential.

Key Findings

In order to further stimulate both further growth of the solar
industry and local job creation without constructing new trade and investment barriers, we recommend the following:

Governments must provide sufficient and predictable long-term support to solar energy deployment. Such long-term frameworks bring investments
forward and encourage cost cutting and innovation, so that government support can decrease over time. A price on carbon emissions
would provide an additional long-term market signal and likely accelerate this process.

Policymakers should focus not on solely the manufacturing jobs in the solar industry, but on the total number of jobs that could possibly be created including those in research, project development, installation, operations and maintenance.

Executive Summary

Policymakers seem to face a trade-off when designing national trade and investment policies related to clean energy sectors. They have
pledged to address climate change and accelerate the large-scale deployment of renewable energy technologies, which would benefit
from increased global integration, but they are also tempted to nurture and protect domestic clean technology markets to create green
jobs at home and ensure domestic political support for more ambitious climate policies. This paper analyzes the global integration of the
solar photovoltaic (PV) sector and looks in detail at the industry’s recent growth patterns, industry cost structure, trade and investment
patterns, government support policies and employment generation potential.

About the Authors

Jacob Funk Kirkegaard is a research fellow at the Peterson Institute for International Economics. Thilo Hanemann is research director
at the Rhodium Group. Lutz Weischer is a research analyst with the World Resources Institute’s Climate and Energy Program. Matt
Miller is a consultant in the solar industry with manufacturing and development experience.